Romney: Hey, I like ethanol subsidies!

posted at 11:25 am on May 28, 2011 by Ed Morrissey

What takes more courage in this Tea Party, deficit-hawk atmosphere among Republicans — opposing ethanol subsidies in Iowa, or professing support for federal price interventions? Mitt Romney clearly believes it’s the latter:

It was an odd setting for a policy pronouncement, but on the sidewalk outside the Historical Building here, former Massachusetts Gov. Mitt Romney embraced ethanol subsidies. It came just days after and blocks from where his rival for the Republican presidential nomination, Tim Pawlenty, said the subsidies should be phased out.

“I support the subsidy of ethanol,” he told an Iowa voter. “I believe ethanol is an important part of our energy solution for this country.” Iowa leads the nation in the production of corn, a main source of ethanol.

Really? Ethanol may be “an important part of our energy solution,” but that would only be true if ethanol could compete without price supports. Ethanol is hardly an emerging technology that needs federal support for R&D. It’s a mature technology, and federal subsidies exist solely to artificially lower its price at the pump to make it competitive with gasoline.

Furthermore, the use of food to feed gas tanks is one of the worst ideas we’ve had in green energy. The IMF made that point almost three years ago, declaring that the destruction of corn for ethanol had exacerbated food crises and also contributed to worldwide water shortages. A year later, the Congressional Budget Office blamed federally-subsidized ethanol production for hiking food prices. They estimated that the US would issue nearly $1 billion in extra food stamps in 2009 because of the inflationary pressure caused by its subsidization of ethanol production.

Not only are we paying a hidden price at the pump for these subsidies to make ethanol look better as a solution, we’re paying more at the grocery store and more in entitlement spending to boot. Hey, what’s not to like for a conservative?

Pawlenty went to Iowa and told the truth — that the federal government’s subsidies of ethanol were bad policy that we can no longer afford. Romney went to Iowa and pandered for big-government solutions in a market that should either be standing on its own two feet by now or putting resources into other solutions instead. Which candidate showed political courage?

Pawlenty is taking a huge gamble…and so far he is getting little traction from it.

There are arguments for subsidies… such as they reduce our dependence on foreign oil… And they make far more sense than tobacco subsidies. Why don’t we start there? Oh yeah because the South is so “conservative” and all.

I think phasing them out would be a good idea… but like anything that changes markets drastically, right now, it would hurt the economy, it doesn’t seem too wise to just stop them cold turkey.

Subsidies provide jobs… sad but true.

Plus, Romney supported them in 2008, he can’t flip flop, even if it makes sense.

Instead of worrying about the subsidies we should be more concerned with the mandate for ethanol in the first place. That’s what really needs to go and then the problem of subsidies disappears. Ethanol doesn’t make a very good fuel compared to gasoline or diesel and it certainly doesn’t help the environment. Just one big scam on top of another.

If New Mexico were the first primary state, Mitt would be selling enchilada subsidies and free Governemtn subsidized laptops in Spanish. I’ll say one thing about “ladies of the night” they’re more honest about what they’ll do for a living than this crop of pretend leaders.

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I call bingo on the pander word. There have been a couple times recently that I was afraid that Pawlenty was going to use the ‘No Panderbear Here’ phrase. I’m just glad to see that word… and not have it being use by one of our potentials in a bid to lose credibility.
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Thanks for the chuckle… As a guy at work once said… “Of course they lie. Their politicians”. Applies to pandering too.
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Grow food-not SUV fuel.

Agree.. with a caveat… Grow food on the good food crop land… and whatever fuel crop weeds will grow on the leaser soil… go for it.
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I’m a few years away from planting a black willow crop (couple acres, awesome soil for that, borderline for crops)… Done right… very reasonable wood chip stove fuel. (And it’s almost carbon neutral… ;)
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I’d like to grab that chump by his well-styled hair, drag him off to Uganda, and sit him down at the orphanage I work with there and have him live on for one day what they are struggling to live on all the time. Food prices have sky-rocketed over the last several years, a big part of it being the tremendous amount of if because of the food going into the gas tanks of SUVs.

Mitt, how many hundreds of thousands are you willing to let starve to death from artificially inflated food prices so the government can keeps diverting food into subsidized fuel?

Political courage and Mitt Romney are two terms that I would not put in the same sentence. Romney has exhibited a history of political pandering for electability expediency’s sake, not out of convictions.

Being a devil’s advocate for a moment, if we are going to subsidize corn through either crop support or ethanol subsidies, I would choose ethanol.
That being said, we should remove both subsidies, but good luck with that – both repubs and dems are addicted to them, and I don’t mean the politicians.

“I support the subsidy of ethanol,” he told an Iowa voter. “I believe ethanol is an important part of our energy solution for this country.” Iowa leads the nation in the production of corn, a main source of ethanol.

DOA. Romney shouldn’t waste his time & money or our time & money runny for president.

No they don’t. They redistribute jobs from one industry to another. Only the private sector creates jobs.

Ponz on May 28, 2011 at 11:56 AM

I am actually involved in agriculture and I’m telling you they provide jobs… farmers are buying machinery and such, land rents are way up, so the farm towns are getting money spend there. Farmers and people in support industries are even building houses.

If you stop that cold turkey… it would be a disaster.

Why do we subsidize tobacco? Because if we didn’t many farmers would lose a main rotation crop and the machinery companies would lose money and small farm towns would be effected…

Our agriculture is built on government subsidies. Like it or not.

The philosophy is that farming is so risky and so expensive that one bad year and we could lose the ability to grow our own food. It is supposed to keep prices even, year to year.

But in the case of corn the call for more ethanol has seriously effected the price of everything!

Land prices have sky rocketed in Washington State… our family trust is considering selling because this might be the top of a bubble. But one never can tell… like gold. Is it a bubble? Or would we be sorry when the price doubles five years from now?

One way to burst that bubble would be to suddenly stop corn subsidies. It might be really bad.

I greatly admire Pawlenty’s Ryanesque truth telling campaign. I hope a majority of voters share my admiration. He doesn’t excite me the way Cain or Perry do, but I certainly wouldn’t underestimate the viability of his “tortoise and the hare” campaign strategy.

The ending of ethanol subsidy will not mean an end to farming in Iowa or anywhere else. The corn will go back to being what it is…food. The farmers know this and the only ones hurt will be those who invested in refineries that produce ethanol. Maybe they can be converted to produce something actually useful. Like Beer.

Why do we subsidize tobacco? Because if we didn’t many farmers would lose a main rotation crop and the machinery companies would lose money and small farm towns would be effected…
petunia on May 28, 2011 at 12:21 PM

We subsidize it because the finished product yields cash cow levels of tax revenue. That’s the only reason it isn’t illegal. Can you think of another crop which is subsidized, yet the usage of it is restricted? Rotation crops can be replaced. Life in the fast lane ain’t always pretty.

There are arguments for subsidies… such as they reduce our dependence on foreign oil… And they make far more sense than tobacco subsidies. Why don’t we start there? Oh yeah because the South is so “conservative” and all.

petunia on May 28, 2011 at 11:42 AM

There are no good arguments for subsidies and most of them are not true. For instance, ethanol subsidies do not reduce dependence on foreign oil. They make no more sense than tobacco subsidies which, by the way, ended in 2004. The ethanol industry is not a new technology, ethanol is mandated for use in gasoline. It’s more expensive to make than gasoline and produces less energy than gasoline. And yet the industry would collapse without subsidies. Your snide remark about the South was from ignorance, however all farm subsidies should be stopped.

RomneyCare + ethanol subsidies = Loser

RINOS, Progressive Republicans, Rockefeller Republicans, Country Club Republicans, Establishment Republicans etc. Embrace the principles of small, Constitutional government and individual freedom or join the Democrat Party!

I believe my grandmother would have called that a hissy fit. Enjoy the “A” ticket ride to the waterfall.

chemman on May 28, 2011 at 12:30 PM

Oh! I see, so you were a supporter of Romney, but now… oh never! If he would just change his stand on subsidies… then you would be behind him 100%!

I’m sorry but, I was not born yesterday.

Everyone else is going to have to come down on this… and in the past everyone, including Palin, has come down on the side of subsidies… for obvious reasons, people in Iowa like them.

Pawlenty has taken a risky stand. If that is going to make or break a candidate, we now have a test case.

But we do need a grain of salt, because he only said we should begin to phase out… I agree… but I don’t vote in the Iowa caucus… also, Pawlenty has said the opposite not long ago. So how serious is he? Or how desperate is he to move the numbers?

This is called politics folks, you should familiarize yourself with the rules.

Pawlenty needs Palin out. He is going nowhere until she admits she isn’t running.

Well, Romney just lost my vote, unless he’s the last Republican standing. I believe the vast majority of people, who don’t live in Iowa, agree the subsidizing ethanol is really dumb. The fact that Romney wants to pander to the people of Iowa isn’t too well thought out.

If he really wanted to do something, take the corn that goes into ethanol, process it and send it to the starving people in Africa at least it will be used for a good cause.

Productive ag land is up for a lot of reasons….lots of big “hot” money is in ag because it can produce a cash flow…and even if things go seriously wrong with the economy ag land will still be able to produce cash. Gold is not a productive investment, it can hedge currency and inflation risk but that’s about

Ethanol consumers about 40 percent of the corn crop. I.e. the government has control of 40 percent of the corn ag business. They also control the sugar business…forcing out other countries. Yeah, phase out over several years…sure.

There are arguments for subsidies… such as they reduce our dependence on foreign oil…
petunia on May 28, 2011 at 11:42 AM

Ignorance is bliss.
The energy density of ethanol is significantly less than gasoline (it’s a chemistry thing). You will get poorer gas mileage using the standard 10% ethanol blend at whatever octane your car uses. That means more fuel to travel the same distance. Therefore you end up using just as much foreign oil in the long run.

From a chemistry point of view it is nearly a worthless energy substitute.

chemman on May 28, 2011 at 12:27 PM

It is used to cut the fuel mix, thus lowering the proportion of oil in a tankful, and thus lowering our oil imports. At least we get a generic benefit out of that, unlike regular crop subsidies, which merely raise the cost of food artificially.

After Romney was born
His parents were torn
The name they picked out
without a doubt
they truly did love,
t’was “baseball glove.”
Yet they knew it was awkward
as a name, quite absurd.
So, for an easier fit
they changed it to “Mitt”.
Thus, the dye was cast
from out of the past
this pattern of change:
first his name, then it would range
from issue to issue to suit his desire
the White House to acquire.
True, we can be quite hard on Mitt,
but he could be a better fit
to heal our struggling nation
and rebuild our financial reputation.
Yes, his followers imagine a more fit nation
Which sounds far better than an Obamanation.

“I believe ethanol is an important part of our energy solution for this country.”

Which is the equivalent of saying we can get our energy from batteries.

It takes more energy to make a gallon of ethanol than the energy contained in a gallon of ethanol. It’s only benefit is as an oxygentate to reduce nasty emmisions from cars, but modern engines don’t need that any more. Ethanol is a waste in so many ways.

I never was a supporter of Romney. He is the “A” ticket ride to the unrated waterfalls. The Dems are the “E” ticket ride to the same waterfalls. In the end my sorry arse is still taken over the waterfalls. I want somebody that will get us out of the river named economic disaster. More of the same won’t cut it with me and Romney is just more of the same.

Ethanol results in fewer miles per gallon when mixed with gasoline. Ethanol pollutes more than gasoline does. Ethanol can be destructive to engines, pipelines and containers.

Whatever the % of corn production devoted to ethanol is that same % not devoted to animal feed and human food. Which means higher meat prices, higher veggie prices, higher soft drink prices, higher anything made with corn or corn byproducts…

Whatever the % of corn production devoted to ethanol is that same % not devoted to animal feed and human food. Which means higher meat prices, higher veggie prices, higher soft drink prices, higher anything made with corn or corn byproducts…

Gohawgs on May 28, 2011 at 12:51 PM

My husband and I were just talking about this this morning… I am not all that versed in what Obama did to cause such a steep climb in farm prices… but land has just about doubled in the last couple of years. And we are blaming it on corn subsidies.

I benefit from it, but I am not for messing with the free market that causes bubbles… so we are trying to decide if this is a bubble. And maybe we should sell.

I’m sorry, but I don’t think Iowa is as important as it once was. I think the candidate that sticks to principle, even if it’s not what Iowans want to hear, and loses the caucuses, comes out ahead in the long run.

I wouldn’t exactly call a subsidy a “free” market. I would think that this “bubble” is akin to the mortgage bubble that popped in ’08. We’ve seen how that’s turned out. Social engineering in the 70’s, added to in the 90’s and not stopped in between or after even though many in Gov’t saw the train coming…

I wouldn’t exactly call a subsidy a “free” market. I would think that this “bubble” is akin to the mortgage bubble that popped in ’08. We’ve seen how that’s turned out. Social engineering in the 70′s, added to in the 90′s and not stopped in between or after even though many in Gov’t saw the train coming…

Gohawgs on May 28, 2011 at 1:04 PM

Yes, that is what we were saying, we had an offer for our farm land… and it was high! But I want to keep it, because I think it has been a steady safe investment and we aren’t retiring for another fifteen-twenty years probably.

Romney is so far off my list that I’d just assume vote for Obama, so I couldn’t care less if he is vying for the corrupt establishment insider vote, but what I will be interested to see is if Bachmann is willing to forswear ethanol subsidies.

None of you were going to support Romney anyway! You are such hypocrites!!!!

Why would you pretend that you would love Romney… oh but now… oh now….? Yah, right.

petunia on May 28, 2011 at 12:26 PM

I think I’m a legit example of the kind of person you’re worried about here. I was a Romney guy (look it up if you must), but this is unfathomable to me as an economist (and the son of an Ag Department economic analyst to boot). Fermentables compete with food uses and use a ton of both energy and water to produce. If you want to talk about biodiesel from camelina grown on marginal lands or something, that’s one matter. Even then I wouldn’t support subsidies, which just cause inefficient substitution.

Really cuts against his economic quals to me. Subsidies are f***ing stupid policy.